Solar-process heat technologies enable temperatures of up to 400°C today, potentially fulfilling almost half of the heat demand in the world’s industrial sector, according to a report by the International Renewable Energy Agency (IRENA).

“We have much higher heat consumption in industry than electricity, so companies will save increasing energy costs on their heat demand side in the future. Using solar heat also increases a company’s competitiveness by guaranteeing stable energy prices in the long run,” said Bärbel Epp, Managing Director at ‎Solrico, a research agency focusing on the solar heating and cooling sector.

In Spain, industries that are burning diesel and Liquefied Petroleum Gas (LPG) are benefiting the most from CSH systems, with payback periods below five years, according to Diego Crespo Mencía, Project Engineer at ‎Protermosolar (Spanish Solar Thermal Electric Power Industry Association).

In countries like Mexico and India, CSH plants for industrial processes are being refinanced in just three to five years, which makes these projects commercially viable investments.

“The more expensive the fossil fuel is, the shorter the payback period. Additionally, if an industry installs a CSH facility today and it’s running 20 years from now, the IRR on this investment could be as high as 20% [the average lifetime of a solar thermal system]”, Mencía noted.

Despite these demonstrated benefits, CSH systems are still new to many countries. Among the biggest bottlenecks are the lack of familiarity with the technology and the low oil and gas prices in some markets. Around 40% of industrial energy consumption is covered by natural gas and around 41% by petroleum, according to IRENA.

“Industries are not aware that CSH technology exists and that it’s a solution that can replace fossil fuels in thermal processes,” Crespo said.

Today, Mexico and India have the largest number of solar process heat systems in operational plants, and region-wise, Europe has the largest number of plants.

“India is a policy-driven solar market supported by international organizations, and one-third of the investment cost [of a CSH system] is subsidized by the state. In Mexico, the market is driven by professional suppliers and cost-effective parabolic trough collectors that can beat the energy prices of fossil-fuel oil boilers,” Epp explained.

One of the important CSH plants can be found in Chile, a 10 MWth parabolic trough collector that was installed in 2012 at a copper mine in the Atacama Desert. Developed by Spain’s Abengoa for Minera El Tesoro, the solar thermal plant supplies steam at 250°C, substituting as much as 55% of the diesel fuel used in copper extraction.

Worldwide, more than 500 industrial manufacturers are using solar heat in their facilities, mostly in food & beverage, followed by machinery and textiles, research by Solar Payback found.

In countries where solar irradiation and fuel prices are high, such as a Jordan and Morocco, CSH is a highly promising avenue for industry.

RAM Pharma, a Jordan-based pharmaceuticals producer, capitalized on this opportunity in 2015 by installing a CSH system to generate process steam for drying, sterilization and fermenting.

Developed by Germany’s Industrial Solar, the Fresnel-based plant supplies steam at 160°C and has reduced the factory’s diesel consumption by 42%, according to Mahmoud Al Najami, General Manager of RAM Pharma, who was quoted in the Solar Heat for Industry brochure.

Elsewhere in the MENA region, fossil fuel subsidies have long impaired the cost-competitiveness of solar energy.

However, countries like Egypt, Morocco, Oman and Saudi Arabia are gradually phasing out energy subsidies. At the same time, the increasing costs and volatility of fossil fuel prices are improving the viability of CSH systems.

“The removal of energy subsidies will be one of the best drivers for CSH systems because it immediately makes the industry aware,” Epp highlighted.

“Even an announcement which might be delayed is considered a threat because industries plan for the long term. This should also open doors for turnkey suppliers of CSH systems.”

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The Middle East and North Africa Concentrating Solar Power Knowledge and Innovation Program aims to accelerate CSP investments in the region by addressing knowledge and awareness gaps, linking projects with sources of finance and technical advice, and promoting innovation. This three-year program was launched in late 2016 by the World Bank with support from the Climate Investment Funds (CIF).

The Center for Mediterranean Integration (CMI) is a multi-partner platform where development agencies, Governments, local authorities and civil society from around the Mediterranean convene in order to exchange knowledge, discuss public policies, and identify the solutions needed to address key challenges facing the Mediterranean region.

About CIF

Since 2008, the Climate Investment Funds (CIF) has built a portfolio of over 300 investments in 72 developing and middle-income countries to scale up renewable energy and clean technologies, mainstream climate resilience in development plans and action, and support the sustainable management of forests. Although most programs and projects are still in the early stages of implementation, our funding has already contributed to over 3 gigawatts of new renewable energy capacity and close to 3 million people are already benefiting from CIF-supported climate resilience measures. Our experience shows that with strong leadership, the right technical and financial support, and inclusive partnerships, difficult investment decisions can be made with tangible results.